Matthews International Reports Results for Fourth Quarter and Fiscal Year Ended September 30, 2021
Matthews International Corporation (MATW) reported record annual sales of $1.67 billion for fiscal 2021, a $172.7 million increase from the previous year. The fourth quarter sales reached a new high of $438.8 million, up 9.9%. Operating cash flow stood at $162.8 million, with debt reduced by $70.8 million. However, the company reported a net loss of $3.7 million in Q4 and a diluted loss per share of $0.12. Non-GAAP adjusted EPS for Q4 fell to $0.80, a 27.9% decrease year-over-year. Looking ahead, while sales growth is anticipated for fiscal 2022, adjusted EBITDA may decline due to rising commodity costs.
- Record annual sales of $1.67 billion, up 11.5% from FY2020.
- Fourth quarter sales increased to $438.8 million, a new quarterly record.
- Operating cash flow of $162.8 million for FY2021, highlighting robust cash generation.
- Debt reduced by $70.8 million in FY2021, improving financial stability.
- Continued growth in energy solutions and retail-based sales expected in FY2022.
- Fourth quarter net loss of $3.7 million, marking a significant decline from $7.4 million profit last year.
- Non-GAAP adjusted EPS decreased from $1.11 to $0.80, reflecting operational challenges.
- Adjusted EBITDA fell to $52.0 million in Q4 FY2021, down 18.9% year-over-year due to increased commodity costs.
- Projected modest decline in adjusted EBITDA for FY2022 amid rising inflation and supply chain challenges.
Financial Highlights – Fiscal 2021:
- Record annual sales of
$1.67 billion , exceeded prior year by$172.7 million - Operating cash flow of
$162.8 million - Debt reduction of
$70.8 million for fiscal 2021 - GAAP EPS of
$0.09 ; Non-GAAP adjusted EPS of$3.28
Financial Highlights – 4th Quarter:
- Sales increased to
$438.8 million , a new quarterly Company record - Operating cash flow of
$56.0 million - Debt reduction of
$28.8 million
PITTSBURGH, Nov. 18, 2021 (GLOBE NEWSWIRE) -- Matthews International Corporation (NASDAQ GSM: MATW) today announced financial results for the quarter and fiscal year ended September 30, 2021.
In discussing the Company’s results for the quarter, Joseph C. Bartolacci, President and Chief Executive Officer, stated: “I am pleased to report that the Company established another record for quarterly sales in the fiscal 2021 fourth quarter. As a result, the Company surpassed its adjusted EBITDA outlook for the quarter. Each of our segments contributed to our year-over-year consolidated sales growth of approximately
“It is important to start by expressing my continued appreciation and admiration for the hard work and dedication of our employees. Our success reflects their efforts during the pandemic, including managing through current supply chain and labor market challenges.
“Sales for the SGK Brand Solutions segment were
“Our Memorialization segment reported sales of
“Sales for the Industrial Technologies segment for the fiscal 2021 fourth quarter were
“On the strength of our consolidated sales growth, adjusted EBITDA for the current quarter exceeded the outlook we communicated last quarter. However, as expected, significant increases in commodity costs unfavorably impacted adjusted EBITDA compared with the fourth quarter last year.
“During the fiscal 2021 fourth quarter, we generated operating cash flow of
“In addition, we are in the process of terminating and settling our principal domestic defined benefit retirement plans. During fiscal 2021, our pension liability significantly declined from
Fourth Quarter Fiscal 2021 Consolidated Results (Unaudited)
| ($ in millions, except per share data) | Q4 FY2021 | Q4 FY2020 | Change | % Change | |||||||||||||
| Sales | $ | 438.8 | $ | 399.1 | $ | 39.7 | 9.9 | % | |||||||||
| Net (loss) income attributable to Matthews | $ | (3.7 | ) | $ | 7.4 | $ | (11.1 | ) | (149.6 | ) | % | ||||||
| Diluted (loss) earnings per share | $ | (0.12 | ) | $ | 0.24 | $ | (0.36 | ) | (150.0 | ) | % | ||||||
| Non-GAAP adjusted net income | $ | 25.2 | $ | 34.8 | $ | (9.6 | ) | (27.6 | ) | % | |||||||
| Non-GAAP adjusted EPS | $ | 0.80 | $ | 1.11 | $ | (0.31 | ) | (27.9 | ) | % | |||||||
| Adjusted EBITDA | $ | 52.0 | $ | 64.1 | $ | (12.1 | ) | (18.9 | ) | % | |||||||
| Note: See the attached tables for additional important disclosures regarding Matthews’ use of non-GAAP measures as well as reconciliations of non-GAAP measures to corresponding GAAP measures. Organic sales represent changes in sales excluding the impact of acquisitions, divestitures, and changes in foreign currency exchange rates. | |||||||||||||||||
Consolidated sales for the fiscal 2021 fourth quarter were
Net income attributable to the Company for the quarter ended September 30, 2021 represented a net loss of
On a non-GAAP adjusted basis, earnings for the fiscal 2021 fourth quarter were
Fiscal 2021 Consolidated Results (Unaudited)
| ($ in millions, except per share data) | YTD FY2021 | YTD FY2020 | Change | % Change | |||||||||||
| Sales | $ | 1,671.0 | $ | 1,498.3 | $ | 172.7 | 11.5 | % | |||||||
| Net income (loss) attributable to Matthews | $ | 2.9 | $ | (87.2 | ) | $ | 90.1 | 103.3 | % | ||||||
| Diluted earnings (loss) per share | $ | 0.09 | $ | (2.79 | ) | $ | 2.88 | 103.2 | % | ||||||
| Non-GAAP adjusted net income | $ | 104.9 | $ | 93.9 | $ | 11.0 | 11.7 | % | |||||||
| Non-GAAP adjusted EPS | $ | 3.28 | $ | 3.01 | $ | 0.27 | 9.0 | % | |||||||
| Adjusted EBITDA | $ | 227.8 | $ | 203.1 | $ | 24.7 | 12.2 | % | |||||||
| Note: See the attached tables for additional important disclosures regarding Matthews’ use of non-GAAP measures as well as reconciliations of non-GAAP measures to corresponding GAAP measures. Organic sales represent changes in sales excluding the impact of acquisitions, divestitures, and changes in foreign currency exchange rates. | |||||||||||||||
Consolidated sales for the year ended September 30, 2021 were
Net income attributable to the Company for the year ended September 30, 2021 was
On a non-GAAP adjusted basis, earnings for the year ended September 30, 2021 were
The Company purchased approximately 380,000 shares under its repurchase program during fiscal 2021.
Outlook
Mr. Bartolacci further stated: “We have exciting growth opportunities in several of our businesses. Sales for our energy solutions business, which supports the electric vehicle market, grew significantly in fiscal 2021 and, based on current backlogs and significant interest from multiple well-known auto manufacturers, are expected to significantly grow again in fiscal 2022. The retail-based businesses in our SGK Brand Solutions segment continue to recover from the unfavorable sales impacts of the pandemic. In addition, order rates and backlogs in the warehouse and product identification businesses are expected to support continued sales growth for the Industrial Technologies segment. Further, although declining death rates as the pandemic subsides are expected to impact casket and cemetery memorial unit sales, higher volume trends and continued growth in cremation-related sales are expected to mitigate some of this impact. As a result, we are currently projecting overall growth in consolidated sales for fiscal 2022.
“Although we are projecting consolidated sales growth for fiscal 2022, adjusted EBITDA will be challenged by the significant increases in commodity costs during the past year. In addition, labor markets, supply chain and other inflationary challenges will also have an impact next year. We expect our projected consolidated sales growth and ongoing cost-reduction initiatives to mitigate some of this impact and, as a result, are projecting a modest decline in consolidated adjusted EBITDA for fiscal 2022.
“We will continue to emphasize cash flow management and are targeting further reduction in outstanding debt in fiscal 2022.”
Webcast
The Company will host a conference call and webcast on Friday, November 19, 2021 at 9:00 a.m. Eastern Time to review its financial and operating results and discuss its corporate strategies and outlook. A question-and-answer session will follow. The conference call can be accessed by calling (201) 689-8471. The audio webcast can be monitored at www.matw.com. As soon as available after the call, a transcript of the call will be posted in the Investor Relations section of the Company’s website at www.matw.com.
About Matthews International Corporation
Matthews International Corporation is a global provider of brand solutions, memorialization products and industrial technologies. The SGK Brand Solutions segment is a leading provider of packaging solutions and brand experiences, helping companies simplify their marketing, amplify their brands and provide value. The Memorialization segment is a leading provider of memorialization products, including memorials, caskets and cremation and incineration equipment, primarily to cemetery and funeral home customers that help families move from grief to remembrance. The Industrial Technologies segment designs, manufactures and distributes marking, coding and industrial automation technologies and solutions. The Company has approximately 11,000 employees in more than 26 countries on six continents that are committed to delivering the highest quality products and services.
Forward-looking Information
Any forward-looking statements contained in this release are included pursuant to the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks and uncertainties that may cause the Company’s actual results in future periods to be materially different from management’s expectations. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations will prove correct. Factors that could cause the Company's results to differ materially from the results discussed in such forward-looking statements principally include changes in domestic or international economic conditions, changes in foreign currency exchange rates, changes in the cost of materials used in the manufacture of the Company's products, changes in mortality and cremation rates, changes in product demand or pricing as a result of consolidation in the industries in which the Company operates or other factors such as supply chain disruptions, labor shortages or labor cost increases, changes in product demand or pricing as a result of domestic or international competitive pressures, ability to achieve cost-reduction objectives, unknown risks in connection with the Company's acquisitions, cybersecurity concerns, effectiveness of the Company's internal controls, compliance with domestic and foreign laws and regulations, technological factors beyond the Company's control, impact of pandemics or similar outbreaks, such as coronavirus disease 2019 ("COVID-19") or other disruptions to our industries, customers, or supply chains, and other factors described in the Company’s Annual Report on Form 10-K and other periodic filings with the U.S. Securities and Exchange Commission.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
(In thousands, except per share data)
| Three Months Ended September 30, | Year Ended September 30, | ||||||||||||||||||||||||||
| 2021 | 2020 | % Change | 2021 | 2020 | % Change | ||||||||||||||||||||||
| Sales | $ | 438,839 | $ | 399,140 | 9.9 | % | $ | 1,671,030 | $ | 1,498,306 | 11.5 | % | |||||||||||||||
| Cost of sales | (300,774 | ) | (262,815 | ) | 14.4 | % | (1,129,198 | ) | (1,000,537 | ) | 12.9 | % | |||||||||||||||
| Gross profit | 138,065 | 136,325 | 1.3 | % | 541,832 | 497,769 | 8.9 | % | |||||||||||||||||||
| Gross margin | 31.5 | % | 34.2 | % | 32.4 | % | 33.2 | % | |||||||||||||||||||
| Selling and administrative expenses | (107,605 | ) | (97,849 | ) | 10.0 | % | (415,565 | ) | (400,040 | ) | 3.9 | % | |||||||||||||||
| Intangible amortization | (23,043 | ) | (17,875 | ) | 28.9 | % | (84,233 | ) | (71,514 | ) | 17.8 | % | |||||||||||||||
| Goodwill write-downs | — | — | — | % | — | (90,408 | ) | 100.0 | % | ||||||||||||||||||
| Operating profit (loss) | 7,417 | 20,601 | (64.0 | ) | % | 42,034 | (64,193 | ) | 165.5 | % | |||||||||||||||||
| Operating margin | 1.7 | % | 5.2 | % | 2.5 | % | (4.3 | ) | % | ||||||||||||||||||
| Interest and other, net | (7,337 | ) | (9,214 | ) | (20.4 | ) | % | (32,801 | ) | (42,144 | ) | (22.2 | ) | % | |||||||||||||
| Income (loss) before income taxes | 80 | 11,387 | (99.3 | ) | % | 9,233 | (106,337 | ) | 108.7 | % | |||||||||||||||||
| Income taxes | (3,748 | ) | (3,987 | ) | (6.0 | ) | % | (6,375 | ) | 18,685 | (134.1 | ) | % | ||||||||||||||
| Net (loss) income | (3,668 | ) | 7,400 | (149.6 | ) | % | 2,858 | (87,652 | ) | 103.3 | % | ||||||||||||||||
| Non-controlling interests | (8 | ) | 6 | (233.3 | ) | % | 52 | 497 | (89.5 | ) | % | ||||||||||||||||
| Net (loss) income attributable to Matthews | $ | (3,676 | ) | $ | 7,406 | (149.6 | ) | % | $ | 2,910 | $ | (87,155 | ) | 103.3 | % | ||||||||||||
| (Loss) earnings per share -- diluted | $ | (0.12 | ) | $ | 0.24 | (150.0 | ) | % | $ | 0.09 | $ | (2.79 | ) | 103.2 | % | ||||||||||||
| Earnings per share -- non-GAAP(1) | $ | 0.80 | $ | 1.11 | (27.9 | ) | % | $ | 3.28 | $ | 3.01 | 9.0 | % | ||||||||||||||
| Dividends declared per share | $ | 0.215 | $ | 0.21 | 2.4 | % | $ | 0.86 | $ | 0.84 | 2.4 | % | |||||||||||||||
| Diluted shares | 31,708 | 31,401 | 31,987 | 31,190 | |||||||||||||||||||||||
| (1) See reconciliation of non-GAAP financial information provided in tables at the end of this release | |||||||||||||||||||||||||||
SEGMENT INFORMATION (Unaudited)
(In thousands)
| Three Months Ended September 30, | Year Ended September 30, | ||||||||||||||
| 2021 | 2020 | 2021 | 2020 | ||||||||||||
| Sales: | |||||||||||||||
| SGK Brand Solutions | $ | 188,016 | $ | 179,578 | $ | 726,895 | $ | 693,093 | |||||||
| Memorialization | 195,948 | 177,693 | 769,016 | 656,035 | |||||||||||
| Industrial Technologies | 54,875 | 41,869 | 175,119 | 149,178 | |||||||||||
| $ | 438,839 | $ | 399,140 | $ | 1,671,030 | $ | 1,498,306 | ||||||||
| Adjusted EBITDA: | |||||||||||||||||||
| SGK Brand Solutions | $ | 24,239 | $ | 28,836 | $ | 99,665 | $ | 90,644 | |||||||||||
| Memorialization | 33,573 | 43,265 | 165,653 | 146,285 | |||||||||||||||
| Industrial Technologies | 11,417 | 7,548 | 26,659 | 22,753 | |||||||||||||||
| Corporate and Non-Operating | (17,197 | ) | (15,593 | ) | (64,227 | ) | (56,602 | ) | |||||||||||
| Total Adjusted EBITDA(1) | $ | 52,032 | $ | 64,056 | $ | 227,750 | $ | 203,080 | |||||||||||
| (1) See reconciliation of non-GAAP financial information provided in tables at the end of this release | |||||||||||||||||||
CONDENSED CONSOLIDATED BALANCE SHEET INFORMATION (Unaudited)
(In thousands)
| September 30, 2021 | September 30, 2020 | ||||||||
| ASSETS | |||||||||
| Cash and cash equivalents | $ | 49,176 | $ | 41,334 | |||||
| Accounts receivable, net | 309,818 | 295,185 | |||||||
| Inventories, net | 189,088 | 175,100 | |||||||
| Other current assets | 76,083 | 63,954 | |||||||
| Total current assets | 624,165 | 575,573 | |||||||
| Property, plant and equipment, net | 223,707 | 236,788 | |||||||
| Goodwill | 773,787 | 765,388 | |||||||
| Other intangible assets, net | 261,542 | 333,498 | |||||||
| Other long-term assets | 148,877 | 161,386 | |||||||
| Total assets | $ | 2,032,078 | $ | 2,072,633 | |||||
| LIABILITIES | |||||||||
| Long-term debt, current maturities | $ | 4,624 | $ | 26,824 | |||||
| Other current liabilities | 349,601 | 290,044 | |||||||
| Total current liabilities | 354,225 | 316,868 | |||||||
| Long-term debt | 759,086 | 807,710 | |||||||
| Other long-term liabilities | 282,364 | 336,622 | |||||||
| Total liabilities | 1,395,675 | 1,461,200 | |||||||
| SHAREHOLDERS' EQUITY | |||||||||
| Total shareholders' equity | 636,403 | 611,433 | |||||||
| Total liabilities and shareholders' equity | $ | 2,032,078 | $ | 2,072,633 | |||||
CONDENSED CONSOLIDATED CASH FLOWS INFORMATION (Unaudited)
(In thousands)
| Year Ended September 30, | |||||||||
| 2021 | 2020 | ||||||||
| Cash flows from operating activities: | |||||||||
| Net income (loss) | $ | 2,858 | $ | (87,652 | ) | ||||
| Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||||||||
| Depreciation and amortization | 133,512 | 119,058 | |||||||
| Changes in working capital items | 12,982 | 46,367 | |||||||
| Goodwill write-downs | — | 90,408 | |||||||
| Other operating activities | 13,459 | 12,266 | |||||||
| Net cash provided by operating activities | 162,811 | 180,447 | |||||||
| Cash flows from investing activities: | |||||||||
| Capital expenditures | (34,313 | ) | (34,849 | ) | |||||
| Acquisitions, net of cash acquired | (15,623 | ) | (1,000 | ) | |||||
| Other investing activities | 36,943 | 33,131 | |||||||
| Net cash used in investing activities | (12,993 | ) | (2,718 | ) | |||||
| Cash flows from financing activities: | |||||||||
| Net (payments) proceeds from long-term debt | (76,767 | ) | (126,283 | ) | |||||
| Purchases of treasury stock | (11,858 | ) | (4,428 | ) | |||||
| Dividends | (27,704 | ) | (26,437 | ) | |||||
| Other financing activities | (6,523 | ) | (15,104 | ) | |||||
| Net cash used in financing activities | (122,852 | ) | (172,252 | ) | |||||
| Effect of exchange rate changes on cash | 43 | 555 | |||||||
| Net change in cash, cash equivalents and restricted cash | $ | 27,009 | $ | 6,032 | |||||
Reconciliations of Non-GAAP Financial Measures
Included in this report are measures of financial performance that are not defined by GAAP, including, without limitation, adjusted EBITDA, adjusted net income and EPS, net debt and net debt leverage ratio. The Company defines net debt leverage ratio as outstanding debt (net of cash) relative to adjusted EBITDA. The Company uses non-GAAP financial measures to assist in comparing its performance on a consistent basis for purposes of business decision-making by removing the impact of certain items that management believes do not directly reflect the Company’s core operations including acquisition costs, ERP integration costs, strategic initiative and other charges (which includes non-recurring charges related to operational initiatives and exit activities), stock-based compensation and the non-service portion of pension and postretirement expense. Management believes that presenting non-GAAP financial measures is useful to investors because it (i) provides investors with meaningful supplemental information regarding financial performance by excluding certain items that management believes do not directly reflect the Company's core operations, (ii) permits investors to view performance using the same tools that management uses to budget, forecast, make operating and strategic decisions, and evaluate historical performance, and (iii) otherwise provides supplemental information that may be useful to investors in evaluating the Company’s results. The Company's calculations of its non-GAAP financial measures, however, may not be comparable to similarly titled measures reported by other companies. The Company believes that the presentation of these non-GAAP financial measures, when considered together with the corresponding GAAP financial measures and the reconciliations to those measures, provided herein, provide investors with an additional understanding of the factors and trends affecting the Company’s business that could not be obtained absent these disclosures.
ADJUSTED EBITDA RECONCILIATION (Unaudited)
(In thousands)
| Three Months Ended September 30, | Year Ended September 30, | ||||||||||||||||
| 2021 | 2020 | 2021 | 2020 | ||||||||||||||
| Net (loss) income | $ | (3,668 | ) | $ | 7,400 | $ | 2,858 | $ | (87,652 | ) | |||||||
| Income tax provision (benefit) | 3,748 | 3,987 | 6,375 | (18,685 | ) | ||||||||||||
| Income (loss) before income taxes | $ | 80 | $ | 11,387 | 9,233 | (106,337 | ) | ||||||||||
| Net (gain) loss attributable to noncontrolling interests | (8 | ) | 6 | 52 | 497 | ||||||||||||
| Interest expense | 6,975 | 7,950 | 28,684 | 34,885 | |||||||||||||
| Depreciation and amortization * | 35,593 | 30,640 | 133,512 | 119,058 | |||||||||||||
| Acquisition related items (1)** | 503 | 864 | 541 | 3,440 | |||||||||||||
| ERP integration costs (2)** | 560 | 136 | 1,037 | 2,296 | |||||||||||||
| Strategic initiatives and other charges: (3)** | |||||||||||||||||
| Workforce reductions and related costs | — | 4,807 | 10,644 | 9,232 | |||||||||||||
| Other cost-reduction initiatives | 4,978 | 4,767 | 17,317 | 25,718 | |||||||||||||
| Legal matter reserve (4) | — | — | — | 10,566 | |||||||||||||
| Non-recurring / incremental COVID-19 costs (5)*** | 623 | 1,374 | 5,312 | 3,908 | |||||||||||||
| Goodwill write-downs (6) | — | — | — | 90,408 | |||||||||||||
| Net realized gain on divestitures and asset dispositions (7) | — | — | — | (11,208 | ) | ||||||||||||
| Joint Venture depreciation, amortization and interest expense (8) | — | — | — | 4,732 | |||||||||||||
| Stock-based compensation | 2,621 | 1,018 | 15,581 | 8,096 | |||||||||||||
| Non-service pension and postretirement expense (9) | 107 | 1,107 | 5,837 | 7,789 | |||||||||||||
| Total Adjusted EBITDA | $ | 52,032 | $ | 64,056 | $ | 227,750 | $ | 203,080 | |||||||||
| Adjusted EBITDA margin | 11.9 | % | 16.0 | % | 13.6 | % | 13.6 | % | |||||||||
| (1) Includes certain non-recurring items associated with recent acquisition activities. | |||||||||||||||||
| (2) Represents costs associated with global ERP system integration efforts. | |||||||||||||||||
| (3) Includes certain non-recurring costs primarily associated with productivity and cost-reduction initiatives intended to result in improved operating performance, profitability and working capital levels. | |||||||||||||||||
| (4) Represents a reserve established for a legal matter involving a letter of credit for a customer in Saudi Arabia within the Memorialization segment. | |||||||||||||||||
| (5) Includes certain non-recurring direct incremental costs (such as costs for purchases of computer peripherals and devices to facilitate working-from-home, additional personal protective equipment and cleaning supplies and services, etc.) incurred in response to COVID-19. This amount does not include the impact of any lost sales or underutilization due to COVID-19. | |||||||||||||||||
| (6) Represents goodwill write-downs within the SGK Brand Solutions segment. | |||||||||||||||||
| (7) Represents a gain on the sale of an ownership interest in a subsidiary within the Memorialization segment. | |||||||||||||||||
| (8) Represents the Company's portion of depreciation, intangible amortization, interest expense, and other non-recurring charges incurred by non-consolidated subsidiaries accounted for as equity-method investments within the Memorialization segment. | |||||||||||||||||
| (9) Non-service pension and postretirement expense includes interest cost, expected return on plan assets, amortization of actuarial gains and losses, and curtailment gains and losses. These benefit cost components are excluded from adjusted EBITDA since they are primarily influenced by external market conditions that impact investment returns and interest (discount) rates. Curtailment gains and losses are excluded from Adjusted EBITDA since they generally result from certain non-recurring events, such as plan amendments to modify future benefits. The service cost and prior service cost components of pension and postretirement expense are included in the calculation of adjusted EBITDA, since they are considered to be a better reflection of the ongoing service-related costs of providing these benefits. Please note that GAAP pension and postretirement expense or the adjustment above are not necessarily indicative of the current or future cash flow requirements related to these employee benefit plans. | |||||||||||||||||
* Depreciation and amortization was
** Acquisition costs, ERP integration costs, and strategic initiatives and other charges were
*** Non-recurring/incremental COVID-19 costs were
ADJUSTED NET INCOME AND EPS RECONCILIATION (Unaudited)
(In thousands, except per share data)
| Three Months Ended September 30, | Year Ended September 30, | ||||||||||||||||||||||||||||||
| 2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||||||||||
| per share | per share | per share | per share | ||||||||||||||||||||||||||||
| Net (loss) income attributable to Matthews | $ | (3,676 | ) | $ | (0.12 | ) | $ | 7,406 | $ | 0.24 | $ | 2,910 | $ | 0.09 | $ | (87,155 | ) | $ | (2.79 | ) | |||||||||||
| Acquisition related items (1) | 379 | 0.01 | 648 | 0.02 | 407 | 0.01 | 2,580 | 0.08 | |||||||||||||||||||||||
| ERP integration costs (2) | 428 | 0.02 | 101 | 0.01 | 781 | 0.03 | 1,721 | 0.06 | |||||||||||||||||||||||
| Strategic initiatives and other charges (3) | |||||||||||||||||||||||||||||||
| Workforce reductions and related charges | — | — | 3,605 | 0.11 | 10,025 | 0.31 | 6,924 | 0.22 | |||||||||||||||||||||||
| Other cost-reduction initiatives | 4,339 | 0.14 | 3,576 | 0.11 | 14,024 | 0.44 | 19,424 | 0.62 | |||||||||||||||||||||||
| Legal matter reserve (4) | — | — | — | — | — | — | 7,924 | 0.25 | |||||||||||||||||||||||
| Non-recurring / incremental COVID-19 costs (5) | 547 | 0.02 | 1,031 | 0.03 | 4,106 | 0.13 | 2,931 | 0.09 | |||||||||||||||||||||||
| Goodwill write-downs (6) | — | — | — | — | — | — | 81,861 | 2.63 | |||||||||||||||||||||||
| Net realized gain on divestitures and asset dispositions (7) | — | — | — | — | — | — | (8,406 | ) | (0.27 | ) | |||||||||||||||||||||
| Joint Venture depreciation, amortization and interest expense (8) | — | — | — | — | — | — | 2,433 | 0.08 | |||||||||||||||||||||||
| Non-service pension and postretirement expense (9) | 156 | 0.01 | 830 | 0.03 | 4,395 | 0.14 | 5,842 | 0.19 | |||||||||||||||||||||||
| Intangible amortization expense | 18,147 | 0.57 | 13,407 | 0.43 | 63,428 | 1.98 | 53,636 | 1.72 | |||||||||||||||||||||||
| Tax-related (10) | 4,837 | 0.15 | 4,175 | 0.13 | 4,837 | 0.15 | 4,175 | 0.13 | |||||||||||||||||||||||
| Adjusted net income | $ | 25,157 | $ | 0.80 | $ | 34,779 | $ | 1.11 | $ | 104,913 | $ | 3.28 | $ | 93,890 | $ | 3.01 | |||||||||||||||
| Note: Adjustments to net income for non-GAAP reconciling items were calculated using an income tax rate of | |||||||||||||||||||||||||||||||
| (1) Includes certain non-recurring items associated with recent acquisition activities. | |||||||||||||||||||||||||||||||
| (2) Represents costs associated with global ERP system integration efforts. | |||||||||||||||||||||||||||||||
| (3) Includes certain non-recurring costs primarily associated with productivity and cost-reduction initiatives intended to result in improved operating performance, profitability and working capital levels. | |||||||||||||||||||||||||||||||
| (4) Represents a reserve established for a legal matter involving a letter of credit for a customer in Saudi Arabia within the Memorialization segment. | |||||||||||||||||||||||||||||||
| (5) Includes certain non-recurring direct incremental costs (such as costs for purchases of computer peripherals and devices to facilitate working-from-home, additional personal protective equipment and cleaning supplies and services, etc.) incurred in response to COVID-19. This amount does not include the impact of any lost sales or underutilization due to COVID-19. | |||||||||||||||||||||||||||||||
| (6) Represents goodwill write-downs within the SGK Brand Solutions segment. | |||||||||||||||||||||||||||||||
| (7) Represents a gain on the sale of an ownership interest in a subsidiary within the Memorialization segment. | |||||||||||||||||||||||||||||||
| (8) Represents the Company's portion of depreciation, intangible amortization, interest expense, and other non-recurring charges incurred by non-consolidated subsidiaries accounted for as equity-method investments within the Memorialization segment. | |||||||||||||||||||||||||||||||
| (9) Non-service pension and postretirement expense includes interest cost, expected return on plan assets, amortization of actuarial gains and losses, and curtailment gains and losses. These benefit cost components are excluded from adjusted EBITDA since they are primarily influenced by external market conditions that impact investment returns and interest (discount) rates. Curtailment gains and losses are excluded from Adjusted EBITDA since they generally result from certain non-recurring events, such as plan amendments to modify future benefits. The service cost and prior service cost components of pension and postretirement expense are included in the calculation of adjusted EBITDA, since they are considered to be a better reflection of the ongoing service-related costs of providing these benefits. Please note that GAAP pension and postretirement expense or the adjustment above are not necessarily indicative of the current or future cash flow requirements related to these employee benefit plans. | |||||||||||||||||||||||||||||||
| (10) Fiscal 2021 balance represents tax-relate items incurred in connection with the termination of the Company's Supplemental Retirement Plan. Fiscal 2020 balance represents tax-related items incurred in connection with goodwill write-downs. | |||||||||||||||||||||||||||||||
NET DEBT RECONCILIATION (Unaudited)
(In thousands)
| September 30, 2021 | September 30, 2020 | ||||||||
| Long-term debt, current maturities | $ | 4,624 | $ | 26,824 | |||||
| Long-term debt | 759,086 | 807,710 | |||||||
| Total long-term debt | 763,710 | 834,534 | |||||||
| Less: Cash and cash equivalents | (49,176 | ) | (41,334 | ) | |||||
| Net Debt | $ | 714,534 | $ | 793,200 | |||||
| Adjusted EBITDA | $ | 227,750 | $ | 203,080 | |||||
| Net Debt Leverage Ratio | 3.1 | 3.9 | |||||||
Matthews International Corporation
Corporate Office
Two NorthShore Center
Pittsburgh, PA 15212-5851
Phone: (412) 442-8200
| Contact: | Steven F. Nicola | William D. Wilson | |
| Chief Financial Officer | Senior Director, | ||
| and Secretary | Corporate Development |
FAQ
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